The Service Recovery Paradox: True but Overrated?

Stefan Michel, IMD Switzerland
Matthew L. Meuter, California State University, Chico

This article explores the concept of a service recovery paradox—where customers are more satisfied after a service failure and recovery than they are after an adequately delivered service. The study was conducted in a banking context with over 11,000 customer interviews based on actual customer encounters with the bank.

The authors establish that the service recovery paradox is in fact real. More importantly the magnitude and frequency of a service recovery paradox is assessed and we conclude that they are rare events and the impact is small, but significant. Although reliable, error free service delivery is critical; the study highlights the valuable contribution of a strong service recovery program.

 

The research paper appeared in the Journal of Service Management (formerly the International Journal of Service Industry Management, 2008, 19 (4). This paper received the Emerald Literati